To see a list of all state and federal issues which have the potential to affect NAMIC members companies, and to learn more about them, please visit the
Legislative & Regulatory Issues page.

Rate Modernization & Eliminating Redundant Statutes

NAMIC’s top agenda priority remains adoption of modernization laws creating rate-approval standards less restrictive than prior approval. In Rhode Island, legislation was introduced that would repeal the flex rating law, but the bill was not approved (the auto body repair industry is behind the repeal effort). Due in part to election year politics, no modernizing proposals gain momentum this year, but NAMIC continues to engage legislators and regulators in dialogue over flex-rating and other rate modernizing options in multiple states including Alabama, North Carolina, and Pennsylvania.

In 2015, NAMIC intends to engage in dialogue with industry colleagues and legislators in an effort to craft legislation eliminating redundant and inefficient laws effecting insurance companies.
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Underwriting Freedom (Insurance Scoring, CLUE, Predictive Modeling)

Efforts to ban or severely limit the use of credit-based insurance scoring and other underwriting tools were relatively limited in 2014 and no bills advanced. NAMIC continues to work with legislators and regulators in Alaska to expand the use of insurance scoring to policy renewals. We believe that at least a moderate level of opposition to insurance scoring will persist for the foreseeable future. One area we are keeping watch over is regulators delaying approval of rate filings that include insurance scoring. Furthermore, the outcome of the HUD disparate impact litigation could have ramifications for state insurance scoring laws.

Beyond insurance scoring, NAMIC remains vigilant in defending the use of other underwriting tools. This year, we saw an uptick in attacks on the use of Education and Occupation with examples in Connecticut and New York. Further, there is an increasing regulatory interest in the use of telematics and other “big data” predictive modeling tools used in both rating and underwriting. Increased interest will likely result in legislative or regulatory proposals in 2015.

Civil Justice Reform

The business community was mostly successful this year in staving-off of attacks from the trial bar. Negative proposals this year included proposals focused on bad faith, private right of action, and increases to non-economic damage caps. That said 2015 could shape up to be a very challenging year for battling the trial bar. States to keep an eye of will include Maryland, New York, New Jersey, Oregon, and Virginia. On the tort reform side, several positive proposals were introduced this session but none of them advanced. November state legislative election results could impact the tort environment for the next few years.

NAMIC continues to lead insurance industry advocacy efforts on third-party litigation funding. NAMIC is working in conjunction with industry partners to ban or severely restrict this practice. Tennessee became the first state in the country to enact legislation to cap the interest rates that these lenders can charge. NAMIC continues to work with NCOIL in an effort to adopt model legislation that would cap the interest rates these lenders can charge—or to table the issue altogether. States worth watching in 2015 will include Colorado (pending court case), Iowa, Indiana, Illinois, and New Jersey.

Natural Disaster & Coastal Issues

NAMIC continues to work throughout the country to educate regulators and legislators about the negative impacts of enacting overly restrictive regulations and legislation pertaining to property insurance markets. It is likely that we will see legislation related to private flood insurance, anti-concurrent causation clauses, and similar issues in 2015 and beyond. Thanks in part to NAMIC, the industry succeeded in passing a statewide building code in Mississippi this year.

The NAIC is currently engaged in a substantial effort to enhance solvency, corporate governance and enterprise risk regulation. The first two important pieces that are becoming active in the states are changes to the Model Holding Company Act and the Own Risk and Solvency Assessment. NAMIC has made significant efforts over the past two years to convince regulators to provide a compliance threshold or regulatory flexibility for smaller companies related to the Enterprise Risk Report portion of the Holding Company Act. To date, we have succeeded in securing this type of provision in 11 states (AL, FL, HI, ID, IN, KS, LA, ME, OH, TX, and VA). As of this writing, 20 states have enacted the ORSA model. NAMIC advocates have spent significant time working with regulators and legislators to ensure that the confidentiality language in the ORSA proposals is sufficient.

Ride Sharing/Transportation Network Companies

Debate over ride-sharing exploded this year. Legislators in no less than 10 states have taken up the issue with many more states expected to debate this issue in 2015. NAMIC is currently working with the other national trades and national companies in an effort to craft a legislative model that is aligned with NAMIC’s adopted position and that can be supported by the entire insurance industry. California and Colorado enacted legislation this year to regulate the practice. As of this writing, 20 state insurance departments have issued bulletins warning consumers of potential gaps in insurance coverage.

Customer Choice in Auto Repair

Sectors of the auto repair industry continue efforts to pass legislation that would restrict consumer options regarding auto repair and deliberately limit the information insurers can make available to consumers, thereby impairing the ability of consumers to make informed decisions on repairing their vehicles. Some proposals include language that may impose excessive restrictions on insurers’ constitutionally protected commercial free speech. While the auto repair industry seems to largely be pursuing a litigation agenda, there were legislative efforts in several states in 2014 to attack insurers' ability to contract with a network of repair shops and parts ordering platforms. For example, Minnesota House File 2690 would have prohibited an insurer from specifying the use of specific vendors, distributors, manufacturers, suppliers, business platforms, or internal processes in contractual agreements with repair shops. Connecticut, Maryland, and Rhode Island will remain major battle grounds next year over customer choice in auto repair.

Electronic Commerce

Over the past two years, the insurance industry has enjoyed some success in shepherding adoption of legislation allowing for the proof of insurance by use of an electronic device as well as proposals allowing for the electronic distribution of notices as well as language providing insurers with the ability to provide policy forms to customers electronically. That said much work remains to be done.

Targets of Opportunity:

“Storm Scammer” Legislation

Over the past three years, the business-community has had some success combatting unscrupulous home repair contractors who try to dupe consumers following hail and wind storms. Thanks in part to NAMIC, 20 states have passed legislation to protect consumers from fly-by-night contractors. In 2011, Georgia, Illinois, Minnesota, Missouri, Nebraska, and Oklahoma adopted proposals. In 2012, Alabama, Arizona, Indiana, Iowa, Kentucky, Louisiana, South Dakota, and Tennessee adopted proposals. In 2013, proposals were adopted in Arkansas, South Carolina, Utah, and Wisconsin. This year, legislation was adopted in Mississippi and South Carolina.

Accident Response Fees & Related Fees/Taxes

To date, cash-strapped municipalities in at least 34 states currently charge for accident response fees or are considering ordinances to allow for such fees. NAMIC views these fees as a form of double taxation applied only to law abiding citizens who carry insurance. Currently, 12 states – Alabama, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Oklahoma, Pennsylvania, Tennessee, and Utah – prohibit the collection of accident response fees. Legislation to ban these fees was introduced but not adopted this year in Massachusetts and New Jersey.

NAMIC will continue to watch out for attempts by state legislators to increase insurer tax burden in order to sure-up state pension funds and other state obligations. As needed, NAMIC will continue efforts to educate legislators about the impact such efforts could have on insurance premiums.

Workers Compensation Reform

NAMIC is focusing on targeted areas for reform. Areas of emphasis for next year will remain drug repackaging, opioid abuse, and fee schedules. Florida and Hawaii enacted proposals this year to regulate the practice of drug repackaging. We will also closely monitor any additional attempts made by a large broker to become the administrator of state worker’s comp assigned risk pools.

Market Conduct Reform

Currently, some legislators working through NCOIL are meeting with regulators at the NAIC to pursue some market conduct reforms. Progress of this group is slow, but NAMIC will continue to pursue reform where possible. The NAIC is going to unveil a new market conduct accreditation proposal later in 2014 and that effort will last well into 2015.

No-Fault Auto Insurance

NAMIC is working in concert with member companies to reform or repeal broken no-fault auto insurance systems in states where the environment is ripe for real reform. NAMIC continues to work with industry advocates, regulators, and legislators in Michigan in an effort to reform that state’s no-fault system. We also continue to work with industry partners to enact reforms in other states as needed.

Farm Mutual Modernization

NAMIC has assisted farm mutual member companies in several states during the past few years with revising their governing statutes. Although enactments have varied from state to state, most allow for new geographic territory for farm mutual companies and eliminate outdated and sometimes contradictory sections of the code. Progressive proposals that will help ensure the future viability of farm mutual companies were adopted this year in Illinois, Missouri, and South Dakota.